Market Report: Delivery Hiatus Ahead

by Alasdair MacLeod
Gold Money

Gold and silver drifted lower this week in quiet trading. Gold lost $21 from last Friday’s close to trade at $1867 in European morning trade today, and silver drifted 46 cents lower to trade at $24.20 on the same timescale. Comex volumes were subdued but ticked up slightly as the week progressed.

The delayed Commitment of Traders statistics were released on Monday, and they showed that the Swap category (bullion bank trading desks) had managed to claw back some of their short positions. But the scale of their difficulties is barely relieved, as the chart of their net position shows.

Being short of a net 190,567 contracts representing 593 tonnes of gold valued at $35.8bn is a major problem ahead of the prospect of longs standing for delivery of the December contract next week. Our next chart puts the problem in monetary terms, and while there has been some reduction in gross and net liabilities, they are still in unresolvable territory.

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